I'm no rabbi, but an oil/solar combi high-temp hydronic system that actually WORKED with an old-school high mass high-temp boiler would be more expensive than buying a higher-efficiency oil fired boiler that used about the same or lower fuel consumption. The only thing cheap about solar-hydronic is the fuel. As a capital investment it's usually WAY down the list on relative cost-effectiveness of improvements to be made to a typical standard-construction home. We're talking north of $10KUSD to come up with anything that's remotely useful (and probably never cost-effective on a net-present-value basis). (Solar hot water systems are already pre-designed with no real customization cost, and will deliver comparable or better returns than a hybridized heating system.)
Starting at the cheapest most-cost effective improvements to the heating system:
At 40 years of age, if it has the original burner it may not be a flame-retention type, and a ~10-15% reduction in fuel used could be had for under a grand buying a newer-better burner. (Odds are it's already been upgraded though- maybe twice. Flame retention burner retrofits were a booming biz in the early 1980s when fuel oil prices spiked.)
Assuming the thing has been maintained and can still deliver combustion efficiencies north of 80% when properly tuned (measured with a combustion analyzer) it's likely that double-digit savings can be achieved with a microprocessor based economizer control such as the Intellicon HW+ or Beckett Heat Manager (also less than a grand, installed.) In some systems similar gains can be had with a continuous flow approach using "outdoor reset" control that adjusts the boilers output temp up & down with outdoor air temp (a crude model of the heat load) but since the return water from the baseboards into the boiler needs to stay above 140F to avoid acidic condensation in the flue (or boiler), and 140F OUT will likely provide more heat than is being called for much of the time, it's probably not as effective as the economizers that utilize the high mass of the boiler itself to maximize system efficiency.
If hot water is currently being served by an embedded coil in the boiler, decommissioning the coil and adding an indirect-fired HW tank running as a separate zone will improve the overall AFUE. If the place is micro-zoned to death with many smaller zones, using a "reverse indirect" buffer tank with an internal heat exchanger for the hot water will be more efficient. (The boiler then only serves a single zone- the tank, and the other zones only run the pumps/valves drawing heat from the tank.) A reverse-indirect is more expensive, and unless the boiler is already 4x oversized for the whole house load or it's chopped up in to many zones it won't be worth the extra expense. (This is a system design problem to be sorted out with a competent heating designer.)
Beyond that, in most homes the money is better spent on envelope improvements. Typically air-sealing is the first-step- fix all of the big holes first (open flues or leaky dampers, mail slots, leaky dryer vents, etc.) The foundation sill & rim joist are typically the single largest most overlooked air leak, but vent & flue chases & recessed lighitng cans extending through the attic are also pretty common (and huge) air leaks, and it can all typically be fixed for less than 5 grand, cutting heat loss by double-digit percentages.
The next-most cost effective measure tends to be spot-insulating any known (or discoverable) gaps, or where it's cheap & easy to add more. Most pre-Y2K homes have NO foundation insulation, and in MI the heat loss out of an uninsulated basement & band joist can be more than 20% of the total heat load. It has to be done right to avoid mold & rot issues at the foundation sill and any internal studwall, but putting in R12-R20 is likely to be cost-effective given the current annual fuel bill. (Don't just slap up a studwall with batts- all-foam or foam/batt combinations are required, and the foundation must be allowed to dry via vapor diffusion toward the interior which limits the range of workable stackups, and vapor barriers can't safely be used here, since trapping ground moisture in the foundation raises the moisture content of the foundation sill.)
If you're enamored of solar and the solar resource is really there (done a solar survey?), supplemental heat from thermal air-panels such as the SunMate, Cansolair or SolarSheat can sometimes be cost effective, and easier to design around than attempting a shotgun marriage of solar hydronics to a high-temp oil fired heating system.
See:
http://www.sunmatesolarpanels.com/
http://www.cansolair.com/
http://www.yoursolarhome.com/solarsheat.com/index.html
In MI with an 85% AFUE boiler you'll likely save ~1.5-2 gallons/square foot of glazed area with thermal air if you have a completely unobstructed southern exposure. Building integrated built-in versions work about as well as the commercial units, sometimes at lower installed cost, but there is design-time involved. (It's definitely cheaper if done as DIY.) Typical commercial units are in the 15-30 square foot range per panel and quite modular/extensible. You'd have to price it out to figure out how economic that is for the particular situation, but efficiency wise they typically beat mid-temp hydronic flat panels, since they're inherently low-temp, low-loss. But you're talking something on the order of $70-100/square foot (installed price) it's not a financial no-brainer at current oil prices. If oil sees price-spike of '08 levels on a sustained basis it's an easier financial argument to make.
In general solar-thermal makes little sense in homes with clear-wall R-values under R30 in a mid-MI climate. Stripping the siding and adding exterior foam to raise the R value can even be more cost-effective in terms of what it does to oil bill. If this house has 40-50 year old batts in 2x4 studwall for insulation, retrofitting blown goods (cellulose or the super-fine new-school fiberglass like Spider or Optima) might even be more worthwhile, and cheaper than the solar it takes to make the same difference.
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